El Al’s new jets prompt talk of budget flights

El Al has refused to confirm whether its purchase of four new short-haul jets is a signal that it is about to launch a low-cost service to Europe.

Industry insiders believe Israel’s national carrier is preparing to exploit the Open Skies agreement between Israel and the EU when it commences in April 2014.

A Swiss aviation news website, ch-aviation, speculated this week that “El Al is believed to be in the process of setting up a low-cost carrier service using the Boeing 737-800”. The website’s founder, Thomas Jaeger, said he was quoting sources in Israel.

But a spokesman at El Al said: “Everything is possible. The new planes could be used for regular or low cost services. The decision hasn’t been made yet.”

Aside from the extra short-haul capacity, an El Al spokesman said that the airline is considering a new service between London Luton and New York “to connect the two Jewish communities”.

The Open Skies agreement paves the way for greater competition on flights between Israel and Europe, leaving El Al with the task of finding ways to cut costs and compete more effectively within a highly competitive market.

El Al accounts for the first quarter of 2013, published last month, confirmed the purchase of the planes. It also revealed losses of $32.5 million in that period, compared to a loss of $23.3 million in the same period last year.

El Al President Elyezer Shkedy said: “In response to market conditions in international civil aviation (including the new Open Skies policy), El Al board of directors approved the start of a programme for short-haul flights”

El Al experimented with a no-frills scheme in 2009 to compete with easyJet. It allocated up to 20 per cent of the seats on scheduled flights in economy class to flyers prepared to pay extra for services such as check-in, meals, earphones and baggage, on top of a cheaper fare. The scheme lasted one season before being abandoned.

From September 4, easyJet will run a twice-weekly service from Rome to Tel Aviv. Wizz, the Hungarian airline based in Geneva, is introducing a Budapest-Tel Aviv service from June 15 and Ryanair is thought to be looking at offering up to 50 flights per week to Israel from its continental bases.